CBFS Accounting Cost Management Questions Discussion all the requirements in the photo attached (Code: A16/ date 16/5/2020) Which subject: Cost managemen

CBFS Accounting Cost Management Questions Discussion all the requirements in the photo attached

(Code: A16/ date 16/5/2020)

Which subject: Cost management

If there is any program to use : No

Calculations or thury: Both

How many words:

Not mentioned (1800-2000

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Turnitin report needed

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Question 1
20 Marks
“Several strategic performance management frameworks have
been presented that seek to integrate financial and non-financial
measures of performance. The balanced scorecard has become
the dominant strategic performance management framework.”
In relation to the above statement:
a) Discuss the balanced Scorecard, in your discussion you
should Evaluate different perspectives of balanced
scorecard( Financial, Internal business, learning and growth
and Customer), in terms of their objectives and
measurements.
Note – The academic reference is required for the above
question
Question 2
30 Marks
Elica is a trading company which sells different types of
products to retail stores. The Company is using a decision-
making technique CVP analysis to understand how costs and
profits change with changes in volume or level of activity.
The following information is available about the two products
Standard and Deluxe.
Units Sold
Standard Deluxe Total
300,000 100,000
Selling Price per unit (OMR) (Choose between) 20 to 24 30 to 34
Variable costs per unit (OMR)
14 18
Fixed costs (OMR)
1.800.000
Budgeted units
320,000 170,000
Target profit (OMR)
300.000 500.000
Required:
(a) Calculate the breakeven points in units:
10 Marks
(i) If only Standard products are sold
(ii) If only Deluxe products are sold
(b) Calculate the breakeven points in Revenue:
12 Marks
(i) If only standard products are sold
(ii) If only deluxe products are sold
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(b) Calculate the breakeven points in Revenue:
12 Marks
(i) If only standard products are sold
(ii) If only deluxe products are sold
(c) How many units need to be sold to achieve a target profit
if only standard products are sold?
5
Marks
(d) What do you understand by margin of safety? Briefly
explain different steps which can be used to improve margin of
safety.
3 Marks
Note – The academic reference is required for part (d) of the
above question
Section B
Question – 3
30 Marks
Plastic Manufacturing Company:
Plastic Manufacturing Company manufactures Plastic Cartons.
The Competition in the plastic industry is increasing. The
production manager of the company is suggesting using
standard costing system. He explains “Standard costing is a
control technique where actual and standard costs and revenues
are compared to obtain the variances and are used as an
important tool to improve the performance”
The company has the following standard cost card to
manufacture each plastic carton.
Direct material, 2.5 Kg. at OMR 5 per kg.
12.5
Direct Labor – 3 hours at OMR 4 per hour
12
Fixed Overheads – 3 hours at OMR 2 per hour 6
Total standard cost
30.5
Selling
price
45.5
Standard profit
16
Budgeted sales(units)
900
Actual cost and revenue are as follows:
Actual production for the period was 800 to 850 units.
Direct material 2200 kg costing OMR 10500
Direct labour 2300 hours costing OMR 9500
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30 Marks
Plastic Manufacturing Company:
Plastic Manufacturing Company manufactures Plastic Cartons.
The Competition in the plastic industry is increasing. The
production manager of the company is suggesting using
standard costing system. He explains “Standard costing is a
control technique where actual and standard costs and revenues
are compared to obtain the variances and are used as an
important tool to improve the performance”
The company has the following standard cost card to
manufacture each plastic carton.
Direct material- 2.5 Kg. at OMR 5 per kg.
12.5
Direct Labor – 3 hours at OMR 4 per hour
12
Fixed Overheads – 3 hours at OMR 2 per hour 6
Total standard cost
30.5
Selling
price
45.5
Standard profit
16
Budgeted sales(units)
900
Actual cost and revenue are as follows:
Actual production for the period was 800 to 850 units.
Direct material 2200 kg costing OMR 10500
Direct labour 2300 hours costing OMR 9500
Actual sales are 750 Units and sold @ OMR 55
a) Calculate:
I. Material Price Variance
II. Material Usage variance
III. Labor Rate Variance
IV. Labor Efficiency Variance
V. Sales price variance
VI. Sales volume Profit variance
18 Marks
b) Explain possible reasons and interrelationship for labou ,
material and sales variances calculated in part (a) above.
6
Marks
C) As suggested by Production manager standard
costing(Variance analysis) is a tool for control. Evaluate
the Advantages of Variance Analysis for the organization.
6 Marks
Note – The academic reference is required for part (C) of the
above question
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b) Explain possible reasons and interrelationship for labou ,
material and sales variances calculated in part (a) above.
6
Marks
C) As suggested by Production manager standard
costing(Variance analysis) is a tool for control. Evaluate
the Advantages of Variance Analysis for the organization.
6 Marks
Note – The academic reference is required for part (C) of the
above question
Question – 4
20 Marks
A Hardware company is considering a new project to improve
its manufacturing capacity. A new project requires the use of an
existing machine that would otherwise be sold.
The managing Director (MD) of the Company is aware about
the concept of relevant costing but he is not clear about the
application of it in a particular situation.
The following information is available about the machine
Original purchase price = OMR 40,000
Net Book Value of Machine = OMR 10,000
Current sales value (estimated) = OMR 9,000
Required:
a) If company is using the above machine, what is the
relevant cost and what is irrelevant cost of the information
available about the machine. Explain all the costs clearly.
10 Marks
b) What do you understand by relevant cost? Explain the
different Elements of Relevant Costing.
10 Marks
Note – The academic reference is required for part (b) of the
above question
END OF QUESTION PAPER
Cost and Management Accounting – TAKE-HOME EXAMS –
Spring 2020 Page 2

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